Signs point to deflation ahead

With nearly $13 trillion in fiscal and monetary stimulus added to the U.S. financial system and economy, one would think inflation would be just around the corner.

Nope. "Sorry, but it doesn't work that way," as college students say. And these days the foe of inflation hype is no dyed-in-the-wool economic liberal.

Gary Shilling, president of A. Gary Shilling & Co. and no inflation dove, told Bloomberg Radio Wednesday that normally he would be very concerned about the enormous amount of stimulus added to the economy and credit markets. "Normally, it would be inflationary, but it's not now because the economy is shrinking by so much more it's taking more money out the system than we're putting in," Schilling said.